Germany Finals Pays Off WW1 Debt

The real end to the First World War.

Even though German did not singlehandedly start the First World War and was no more guilty than other European powers, as the world war cliche goes, to the Victor goes the spoils.

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Britain and France won the war and were determined to make Germany pay. Instead of healing wounds and rebuilding Europe's economy in toto , Germany was forced to instead accept humiliating demands and make painful concessions: the Versailles Treaty held Germany responsible for the war, parts of the nation's territory were craved off and handed to neighbors, and - most devastatingly - the nation was burdened with obscene financial "compensation" it had to pay to the victors, particularly France. The obligation to accept guilt for the European war was painful for German pride, but it was the latter which would be most consequential.

Economist Keynes saw the financial reparations Germany had to pay and predicated economic hardships for the nation. His prediction was restrained. The Wiemar Republic failed above all not due to fractional politics or Nazi agitation, but due to hyperinflation. In fact a chart of Nazi representation in the Reichstags compliments inflation and unemployment levels in Germany. In other words, Nazis rose and fell with popularity in parallel to economic conditions. Had the Germany economic not been shackled by France's undue demands, the Nazis would have remained a fringe party unable to connect with middle class Germans. But economic destitution was able to convince many normal Germans that the Nazis were right: their problems were due to the fact that the Germans have been unfairly made to pay the costs of the War, unfairly asked to accept sole guilt. The Nazis played to German frustrations and when people are angry nationalism is often a place of solace. And from there it is a slow path to accepting the line that Germany was "stabbed" by a fifth-column, the Jews.

Hyper-inflation during the failed Wiemar Republic was as such that people used German bills as paper for heating stoves and children as building blocks.

The post-war lust for vengeance by Britain and France against Germany burdened Germany to great peril and directly lead to the Second World War. How big was the reparation bill? Germany - 92 years after WW1 officially ended - has just finished paying it off:

The final payment of £59.5 million, writes off the crippling debt that was the price for one world war and laid the foundations for another.

The initial sum agreed upon for war damages in 1919 was 226 billion Reichsmarks, a sum later reduced to 132 billion, £22 billion at the time.

Most of the money goes to private individuals, pension funds and corporations holding debenture bonds as agreed under the Treaty of Versailles, where Germany was made to sign the 'war guilt' clause, accepting blame for the war.

It was the learned lessons of WW2 that led to the post-WW2 era to look a lot different: instead of burdening Germany again, the United States helped to rebuild its (western) economy and Europe started its project of economic integration by focusing on energy which has today bequeathed the European Union.